Commercial Pilots working on contract.

[Dawn Raid]

I've got a new CPL, a new ABN, and a new casual charter flying gig.

I got advise from an accountant that because I'll be earning less than $50,000.00 ( der! ) then it would be just as easy for me to invoice the charter company I work part time for.

Now I hold down a full time job (not flying), and my charter flying is part time at this stage.

The question is - how much does one invoice the company for in order to take into account getting a wage minus tax and super.

I believe the award wage is around $38.00 p/h?

How much tax do I have to pay?

Do I have to pay super if I already pay super along with my primary employer?

I know people will suggest I go to an accountant, however there must be pilots out there who have been in a similar position to me who have been through it all already.

Awaiting your thoughts.

[the wizard of auz]

Mate, I honestly can't see you earning enough from that particular company to be a tax hassel.
Maybe just claim it as a hobby ;) :p

[GeeBeeZee]

Dawn,

I would suggest that you do not invoice for GST (if possible) because you dont earn over 50K, otherwise you will have to submit a quarterly BAS, and they suck.

As you have a ABN (sole trader not a company) tax is calculated simular to personal tax. The tax department will most prolly differenciate your flying income from other income so you will only be able to claim flying expense (type ratings, checkflights, IFR, renewals) against income earned from flying.

However unless you are workin and earn heaps in flying (no likely) you should be able to right off any money you earn in flying so the net effect is $0 so i wouldnt worry so much about tax.

i think that the super calculation is a percentage of total income earned.

GeeBeeZee

[Continental-520]

I don't suppose shifting your tax free threshold from your non flying job to the flying one would work for you, would it, Dawn Raid?

Either that or get them to pay you 'under the table'.

Onya Wiz, I couldn't help but chuckle... :ok:

520.

[Travelair]

You might also want to check the 80/20 rule, and as a sole trader, if providing SERVICES as a pilot does not make you a employee instead of a trader...just a few things someone told me once.

Better check with ATO and an accountant before starting. Unless you earn over 50k, dont bother about gst. Tax paid at the end of the year will be proportional to gross earnings, just like a normal employee, i think. Good luck.

[OpsNormal]

Good onya for having the intestinal fortitude to set yourself up in business, but $38/hr is selling yourself a bit short.

From what I understand the GA award payment is somewhere around the $44-$45/hr for a single-engine driver. Don't forget that to set yourself up in business like that you should be looking at issues such as workers comp insurance and the like..... All costly items to take into account.

There are plenty of links to the award in these BB pages, go look.

Regards,
Ops.

[Gravox]

You said you had an ABN number, did you register for gst? Do not register for gst that way as stated you do not have to submit a BAS statement. If you did not register for gst you can not charge for gst on your invoices either.

When it comes to tax make sure that you do have money saved. I worked for a company as a contractor, and did not place any $$$ aside, and went on holiday. When i came back from holiday i didn't have a job, and no money, and the tax year was coming to an end fast. Only after the help of HNR block I managed to weasle out of what i thought would have been a $2000 tax bill.

If you are not doing much flying it shouldn't be a drama.

[FO Cokebottle]

Dawn Raid,

Structuring yourself is for the future and not for the present.

I was (read "was") in the same position as you and did the following:
1. registered a business name (with the relevent state) obtained a registered business certificate.

2. took said certificate to bank and opened a chequing account in the registered name.

3. maintained accounts and submitted them with my personal return.

INDRODUCTION OF GST..

4. obtained ABN and registered for GST.

5. religiously complete BAS every qtr.

Now over the period of the above (10 years) I have ceased being a contract pilot within Oz and now doing it internationally. Being structured from the outset allows me to do things and obtain advantages not available to those who are not so structured.

Remember....you can carry forward non commercial losses!!!!!!